The Forgotten Rallies: Nine Days That Nobody Remembers

October 15, 1946: +4.01%. The S&P closed at 15.30, up from 14.71. To understand this day, you have to understand the bizarre economy of 1946. The war had ended thirteen months earlier, and the United States was attempting to convert from a wartime command economy back to peacetime capitalism in real time. The Office of Price Administration (OPA), which had controlled consumer prices since 1942, was being dismantled. President Truman had lifted most price controls in June, and the result was exactly what classical economists predicted and politicians hoped to avoid: a burst of inflation followed by a sharp market selloff.

The S&P had peaked at 19.25 in May 1946. By October 9, it had fallen to 14.12 — a drop of 26.6% in five months. The selling was driven by a collision of forces: inflation spiking as price controls lifted, fears of a postwar depression (which nearly every economist predicted), labor strikes paralyzing major industries, and a general uncertainty about whether the wartime economic miracle could survive peace. On October 15, the market simply bounced. There was no single catalyst — no policy announcement, no decisive piece of news. The selling had gone too far, and buyers stepped in. The 4.01% gain erased nothing; the index was still down more than 20% from its high. But it was the first +4% day in the data.

December 9, 1946: +4.22%. The S&P closed at 15.32 — almost exactly where it had been on October 15. In the two months between these rallies, the market had oscillated violently as traders tried to price an economy nobody understood. Meat prices had surged after controls were lifted, then crashed when consumers refused to pay. Industrial production was whipsawing as companies retooled from military to civilian production. The December rally came as the market found a floor around 14.50 and began to accept that the postwar depression the experts predicted was not going to happen. It took another six months for the market to begin a sustained uptrend, but December 9 marked the psychological turning point.

October 23, 1957: +4.49%. The S&P closed at 40.73, up from 38.98. The market had been falling since July, when the index peaked at 49.13. By late October, it was down 19% and the economy was sliding into the Eisenhower recession — the sharpest downturn since 1937. Three weeks earlier, the Soviet Union had launched Sputnik, and the psychological shock rippled through everything, including markets. If the Soviets could put a satellite in orbit, what else could they do? The rally on October 23 came as the Fed signaled it would ease monetary policy to fight the recession. Rates had been at 3.50%; within six months they would be below 1%. The market was pricing in that pivot, and the +4.49% gain was the sharpest single-day move in a decade.

May 29, 1962: +4.65%. The S&P closed at 58.08, up from 55.50. This day ended one of the most dramatic weeks in market history — the "Kennedy Slide" or "Flash Crash of 1962." Starting on May 28, the market had plunged 5.7% in a single session, the worst day since 1929. The crash was blamed on a combination of JFK's confrontation with the steel industry (he had publicly attacked U.S. Steel for raising prices, spooking business confidence), overvaluation in growth stocks, and a general sense that the postwar bull market had run too far. The selling on May 28 was so intense that the ticker tape ran 96 minutes late — a technical failure that amplified panic among traders who couldn't see real-time prices.

The next morning, May 29, the bounce was equally violent. Bargain hunters flooded in, the same growth stocks that had been dumped the day before surged, and the market erased nearly the entire previous day's loss in a single session. The +4.65% gain was a classic "dead cat bounce" that actually stuck — the market never retested the May 28 lows, and by the end of 1962, the S&P was back above 60.

May 27, 1970: +5.02%. The S&P closed at 72.77, up from 69.29. This was the most powerful rally in this episode and the largest single-day gain on the S&P 500 in more than a decade. It occurred at the exact bottom of the 1969–70 bear market — a decline driven by inflation, the Vietnam War, and a political crisis that had turned campuses into war zones.

In late April, President Nixon had announced the invasion of Cambodia, expanding the war beyond Vietnam's borders. The decision triggered mass protests, and on May 4, Ohio National Guard troops shot and killed four students at Kent State University. The nation was in shock. The stock market, already down 25% from its 1968 peak, collapsed further. By May 26, the S&P had fallen to 69.29 — its lowest point in three years.

Then it snapped back. On May 27, buying erupted across the board. The catalyst was partly technical — the market had become deeply oversold — and partly psychological. Institutional investors, who had been dumping stocks for weeks, concluded that the selling had gone too far. The Penn Central Railroad, America's largest, was on the verge of bankruptcy (it would file in June), and the Fed was preparing to ease. The +5.02% rally marked the absolute bottom. Within six months, the S&P was back above 90.

What makes this day remarkable is its context. Students had been shot dead on a college campus three weeks earlier. The country was invading Cambodia. Inflation was running above 6%. The biggest railroad in America was about to fail. And into this storm of despair, the market printed its best day in years. The pattern is consistent and counterintuitive: the best days are not rewards for good news. They are the snap of a rubber band that has been stretched to the breaking point.

The 1973–74 bear market was the most devastating decline since the Great Depression. The S&P 500 fell 48.2% from its January 1973 peak of 120.24 to its October 1974 trough of 62.28. The causes were a toxic cocktail: the OPEC oil embargo quadrupled oil prices, the Watergate scandal consumed the presidency, the Bretton Woods system had collapsed, inflation surged above 12%, and the economy entered a recession that would see unemployment reach 9%. Inside this catastrophe, three days produced +4% rallies.

July 12, 1974: +4.08%. The S&P closed at 83.15, up from 79.89. Nixon was still president but clearly doomed — the Supreme Court would order him to release the Watergate tapes two weeks later. The market was in a grinding decline, and the July 12 rally was a classic bear-market bounce: sharp, violent, and ultimately meaningless in the larger trend. The index would fall another 25% before bottoming in October. But for one day, the selling paused.

October 7, 1974: +4.19%. The S&P closed at 64.95, up from 62.34. The market was now within days of its ultimate bottom at 62.28 (reached on October 3). Nixon had resigned in August. Gerald Ford was president. The economy was contracting. Inflation was at 12.2%. And yet the market rallied, because at some point the last seller sells and the only direction left is up. October 7 was the first sign that the bottom might be in — a tentative step upward from the abyss.

October 9, 1974: +4.60%. The S&P closed at 67.82, up from 64.84. Two days after the first rally, the market surged again. This time the gain stuck. October 3 was the ultimate low, and the two rallies of October 7 and 9 marked the beginning of a recovery that would carry the index to 107 by mid-1975 — a 72% gain from the bottom. It would take until 1980 for the S&P to reclaim its January 1973 high, but the worst was over.

The chart above tells the story of American markets in the postwar era. From 1946 to 1982, the S&P 500 went from roughly 15 to roughly 120 — an eightfold increase that sounds impressive until you realize it took 36 years. Adjusted for inflation, the returns were far more modest. The index spent the 1970s going essentially nowhere, trapped between stagflation and political crisis. Every one of the nine +4% rally days (marked on the chart) occurred during a drawdown, and none of them occurred during the long, grinding advances that characterized the 1950s and early 1960s.

August 17, 1982: +4.76%. The S&P closed at 109.04, up from 104.09. This is arguably the single most important trading day in the history of modern financial markets. It was the day the greatest bull market of the twentieth century began.

Paul Volcker had become Fed chairman in August 1979 with a mandate to destroy inflation at any cost. He raised the Federal Funds rate to 20% — a level that seems almost incomprehensible today — and deliberately induced the worst recession since the 1930s. Unemployment hit 10.8% in November 1982, the highest since the Great Depression. Mortgage rates reached 18%. The prime rate topped 21%. Businesses failed by the thousands. Farmers went bankrupt. The Rust Belt deindustrialized.

But it worked. Inflation fell from 14.8% in March 1980 to 3.8% by November 1982. And on August 17, 1982, the market decided the war was over. Volcker had signaled that the Fed would begin easing — not because the economy was strong, but because inflation had been broken. The Fed Funds rate, which had been above 14% as recently as June, was coming down. On that single Tuesday, the market surged 4.76% on record volume.

What happened next was extraordinary. The August 17 rally was not a bear-market bounce. It was not a dead cat that fell back down. It was the opening shot of a bull market that would run, with corrections along the way, for eighteen years. The S&P 500 closed 1982 at 140.64. By the end of 1999, it stood at 1,469.25 — a tenfold increase. August 17, 1982 was Day One.

Individual stock data in our database begins in November 1974, so we have no stock-level record of the 1946, 1957, 1962, or 1970 rallies — only the index. But for August 17, 1982, we can see what happened beneath the surface. Of 522 stocks in the database that day, 348 advanced (66.7%), 114 were flat, and only 59 declined. The average stock gained 2.38%, and the median gain was 2.09%. The breadth was overwhelmingly positive — this was not a rally driven by a handful of mega-caps. The entire market was moving.

The names on this list tell the story of what Volcker's pivot meant for the real economy. Lennar, the homebuilder, surged 14% — because if rates were coming down, people could afford mortgages again. AMD, a chipmaker that had been battered by the recession, jumped nearly 14% on the promise of an economic recovery. Banks like Associated Banc-Corp, Bank of Hawaii, Truist, and M&T Bank all rallied double digits as falling rates meant lower funding costs and fewer loan defaults. Even Hasbro surged nearly 12% — if parents had money again, they'd buy toys.

The split-adjusted prices look tiny because four decades of splits have shrunk the per-share numbers. AMD at $4.00 in 1982 is the same stock that trades above $100 today. Lennar at $0.99 is now an $80 billion company. These were real businesses pricing in a real economic pivot, and the market was right. The recession ended, rates fell, and the economy boomed.